Nippon Paint : Updated Latest Results and Forecast Page

February 21, 2022 at 12:31 am EST

Latest Results

＜Consolidated Financial Results for the Fiscal Year Ended December 31, 2021 (January 1, 2021 to December 31, 2021)＞

*: Following the business transfer to the Wuthelam Group announced on August 10, 2021, the European automotive coatings business and the two India businesses have been classified as discontinued operations. Revenue, operating profit, and profit before tax figures are only for continuing operations.

During the fiscal year ended December 31, 2021, consolidated revenue of the Nippon Paint Group increased by 29.2% from the previous year to ¥998,276 million due to the acquisition of 100% ownership of the Asian JVs, the acquisition of the Indonesia business owned by the Wuthelam Group (Wuthelam Holdings Limited ("Wuthelam") and Mr. Goh Hup Jin (collectively, "Wuthelam and Mr. Goh") and by Mr. Goh, Wuthelam's subsidiaries, and companies substantively controlled by Wuthelam, and the strong performance of the decorative paints business in China, which is a key business of the Nippon Paint Group. Consolidated operating profit increased by 0.0% from the previous year to ¥87,615 million on higher revenue despite raw material price increases around the world. Consolidated profit before tax declined by 3.3% from the previous year to ¥86,467 million, and profit attributable to owners of parent increased by 53.8% to ¥67,569 million.

*DuluxGroup Limited is an Australian company that owns the Dulux® trademark only in Australia, New Zealand, Papua New Guinea, Samoa and Fiji. DuluxGroup Limited is not associated with, and has no connection to, the owners of the Dulux® trademark in any other countries, nor does it sell Dulux® products in any other countries.

Japan

Revenue for automotive coatings increased from the previous year although the number of automobiles manufactured declined as a result of the semiconductor chip shortage and other factors. Industrial coatings revenue increased due to firm market conditions such as strong new housing starts and the recovery from the COVID-19 downturn in the construction machinery market. Decorative paints revenue increased due to factors such as progress at delayed construction projects despite the impact of a resurgence of the pandemic.
As a result, consolidated revenue increased by 1.6% from the previous year to ¥164,635 million. Consolidated operating profit declined by 36.2% to ¥10,289 million due to higher prices of raw materials. Beginning with the fiscal year ended December 31, 2021, headquarters expenses incurred by NPHD, which were previously allocated to the Japan segment, are classified as "Adjustments" that do not belong to any reportable segment in order to more accurately reflect the performance of each reportable segment.

Asia

Earnings of the Indonesia business have been included in the consolidated performance of the Nippon Paint Group since January 2021. Revenue for automotive coatings increased from the previous year, despite the ongoing impact of the semiconductor chip shortage and other factors, due to the increase in the number of automobiles manufactured in China and Thailand. Revenue of decorative paints, a mainstay business in Asia, was higher than in the previous year as a result of contributions from the Indonesia business, the continuing recovery in demand for repainting interiors of existing homes in China, and market share gains due to aggressive marketing activities in major markets including China, Malaysia, and Indonesia.
As a result, consolidated revenue increased by 49.6% from the previous year to ¥530,216 million, and consolidated operating profit increased by 10.1% to ¥60,862 million.

Oceania

Revenue for decorative paints increased from the previous year due to the absence of the adverse effects of bushfires and floods in the previous year, coupled with robust demand for home renovations. Revenue for the paint related business increased due to strong demand from home renovations.
As a result, consolidated revenue increased by 18.8% from the previous year to ¥176,237 million, and consolidated operating profit increased by 23.7% to ¥19,048 million.

Americas

Revenue for automotive coatings increased from the previous year although the number of automobiles manufactured in the United States, a core region, remained at the previous year's level due to production adjustments at automobile manufacturers as a result of the semiconductor chip shortage. Decorative paints revenue increased from the previous year due to factors such as stable housing demand and favorable weather.
As a result, consolidated revenue increased by 9.0% from the previous year to ¥76,408 million. Consolidated operating profit declined by 20.1% to ¥3,600 million due to higher prices of raw materials.

Other

Revenue for decorative paints and paint related businesses increased due to the continuing brisk market conditions and successful marketing activities.
As a result, consolidated revenue increased by 35.0% from the previous year to ¥50,778 million, and consolidated operating profit increased by 31.5% from the previous year to ¥7,141 million.

Revenue composition by region (Million yen) ■ Japan: 164,635 ■ Asia: 530,216 ■ Oceania: 176,237 ■ Americas: 76,408 ■ Other: 50,778	Revenue composition by business (Million yen) ■ Automotive coatings: 132,744 ■ Decorative paints: 607,115 ■ Industrial coatings: 84,798 ■ Fine chemicals: 16,399 ■ Other paints: 58,259 ■ Paint related business: 98,959

Revenue composition by region

(Million yen)

■ Japan: 164,635

■ Asia: 530,216

■ Oceania: 176,237

■ Americas: 76,408

■ Other: 50,778

Revenue composition by business

(Million yen)

■ Automotive coatings: 132,744

■ Decorative paints: 607,115

■ Industrial coatings: 84,798

■ Fine chemicals: 16,399

■ Other paints: 58,259

■ Paint related business: 98,959

Revenue (cumulative results)

(Million yen)

*1: Following the business transfer to the Wuthelam Group announced on August 10, 2021, the European automotive coatings business and two India businesses have been categorized as discontinued operations. Figures for 9 Months of FY2021 are for continuing operations excluding the amounts for discontinued operations. Figures for 9 Months of FY2020 have been adjusted retrospectively in accordance with the IFRS Standards.
*2: Following the business transfer to the Wuthelam Group announced on August 10, 2021, the European automotive coatings business and the two India businesses have been classified as discontinued operations. Also, there was a change in accounting policy regarding cloud computing agreements beginning with the 4Q of FY2021. As a result, the earnings for FY2021 have been restated to the amounts for continuing operations excluding the amounts for discontinued operations and reflect the accounting policy change. The earnings for FY2020 have also been adjusted retrospectively.

Operating profit (cumulative results)

(Million yen)

Profit attributable to owners of parent (cumulative results)

(Million yen)

*1: Following the business transfer to the Wuthelam Group announced on August 10, 2021, the European automotive coatings business and the two India businesses have been classified as discontinued operations. Profit attributable to owners of parent include profit from discontinued operations.
*2: Following the business transfer to the Wuthelam Group announced on August 10, 2021, the European automotive coatings business and the two India businesses have been classified as discontinued operations. Also, there was a change in accounting policy regarding cloud computing agreements beginning with the 4Q of FY2021. Profit for FY2021 include profit from discontinued operations and reflects the accounting policy change. Profit for FY2020 has been adjusted retrospectively to reflect the accounting policy change.

Earnings Forecast

＜FY2022 Forecast＞ ※February 14, 2022

During the fiscal year ending December 31, 2022, the momentum of the global economic recovery is expected to slow down due to concerns about the resurgence of the pandemic and continuing disruptions in supply chains, coupled with the impact of prolonged hyperinflation due to the rise in the price of crude oil and other factors.
The Nippon Paint Group is implementing a three-year New Medium-Term Plan (FY2021-2023), which started in the fiscal year ended December 31, 2021. In accordance with this plan, we will further strengthen the foundation for growth in our existing businesses and use M&A to add highly skilled people and powerful brands. These actions are aimed at generating additional earnings and achieving sustained growth. These actions include initiatives for more growth in the decorative paints business, including in Asia and Oceania, and for strengthening ETICS, adhesives and other paint related business. At Cromology Holding SAS (Cromology), which we acquired on January 20, 2022, we plan to accelerate its growth by sharing the Nippon Paint Group's expertise and knowhow. We will continue activities to increase our market share in every operating region and business field by driving the autonomous management of our group companies in Japan and other countries.
Based on this outlook, we forecast consolidated revenue of ¥1,200,000 million, consolidated operating profit of ¥115,000 million, profit before tax of ¥113,000 million and profit attributable to owners of the parent of ¥81,000 million.
Based on this earnings forecast, we plan to pay a dividends of ¥11 per share for the fiscal year ending December 31, 2022.

(Billion yen)

Assumptions for the FY2021 Forecast

Japan